The Fair Competition Alliance today filed public comments with the Federal Communications Commission in response to petitions from Chattanooga Electric Power Board and the city of Wilson, NC asking the FCC to intervene to preempt state government authority over municipal broadband deployment. Our letter concluded saying that:

“…state legislators and utility commissioners in states across the country have spent hundreds — probably thousands — of hour deliberating the ways best suited to their states to fulfill their responsibilities under Section 706 of the Telecommunications Act of 1996…”

We urged the FCC

“…to work to encourage broadband deployment in a spirit of collaboration with the states. There is work left to be done. But this should not minimize all that has been accomplished in a relatively short time. Nor should our solutions for serving the remaining two percent destabilize the state-local relationships across the country and encourage local communities to place at risk the economic and financial futures of their constituents.”

The people of Chelan County should read the news with satisfaction. Their public utility is on course to finish the year $10 million ahead of budget. If trends continue, Chelan County PUD will end the year $92.5 million in the black, The World’s Christine Pratt reports.

Deploying broadband infrastructure isn’t as simple as merely laying wires underground: that’s the easy part. The hard part — and the reason it often doesn’t happen — is the pre-deployment barriers, which local governments and public utilities make unnecessarily expensive and difficult.

Before building out new networks, Internet Service Providers (ISPs) must negotiate with local governments for access to publicly owned “rights of way” so they can place their wires above and below both public and private property. ISPs also need “pole attachment” contracts with public utilities so they can rent space on utility poles for above-ground wires, or in ducts and conduits for wires laid underground.

The problem? Local governments and their public utilities charge ISPs far more than these things actually cost. For example, rights of way and pole attachments fees can double the cost of network construction.

So the real bottleneck isn’t incumbent providers of broadband, but incumbent providers of rights-of-way. These incumbents — the real monopolists — also have the final say on whether an ISP can build a network. They determine what hoops an ISP must jump through to get approval….

…Localities are scared of losing revenue, but those revenues are really hidden taxes that are ultimately borne by broadband users.

The opinion goes on to address Google Fiber and ‘open access’ suggesting that:

… the fact remains that we, they, and other broadband providers do need tech-neutral deregulation.

First, some plain and simple good news. The White House this month released a report on broadband growth finding that since 2009, the percentage of American homes reached by high-speed broadband have more than quadrupled, and that average broadband speeds have doubled. More remarkably, between 2000 and 2010, the percentage of American households with a home connection to broadband exploded from 4.4 percent to 67 percent.

Reason’s analysis highlights an significant distinction between U.S. infrastructure development compared with Europe:

Indeed, it’s the willingness of [U.S.] telecom companies to invest in new infrastructure that ensures broadband growth. In the U.S. we enjoy what’s known as “facilities-based competition,” which means that broadband providers own their network and compete with each other based on improvements to their facilities. In most of Europe, by contrast, broadband providers lease access to the network from the local phone company at fixed rates. That may mean a greater number of competitors, but also little incentive to improve the network facility.

The article has numerous links to supporting analysis and is worth a full read.

This well-reasoned, well-documented op-ed from OPALCO members, Chris and Chom Greacens, is a must read for members of the Orcas Power and Light Cooperative who want to understand the risks associated with their electric co-op’s proposal to build and deliver broadband services.

Is OPALCO well-suited to dive into a new and competitive business of telecommunications with very fast changing and complicated technology and no federal subsidies? We’ve seen examples of other coops and municipal utilities having made similar decisions to venture into telecom and fail miserably.

They conclude and recommend:

Cutthroat industry. Little experience. Apparently no financial firewalls to protect a public service we rely on. Lack of transparency in information available to members. This doesn’t look good. Let’s look at other options for getting fast internet, like maybe leasing bandwidth on OPALCO’s existing fiber optic lines to someone else better poised to take these risks.

The Council on Foreign Relations U.S. Broadband Policy and Competitiveness published today an excellent primer on the current issues and debates of broadband. It stops short of taking a position on municipal entry, but explains very well the nature of the broadband challenge and the U.S. global standing in Internet access, speed, and acceptance.